According to
The New York Times, the decision came just hours after Speaker John A. Boehner of Ohio demanded the proposal be withdrawn from the president's budget, "for the sake of middle-class families." Interestingly enough, top Democrats, including Representative Nancy Pelosi of California, the minority leader, pressed for the repeal. Administration officials initially defended the plan as an attempt to redirect tax benefits that they said largely benefit wealthy families toward tax credits that help poorer families. The administration will keep its plan to expand other higher education tax breaks, a White House official told The Times. (For more on this story, click here.)

What are your thoughts on the administration scrapping its proposal? Are you relieved? Share your thoughts in the comments section. And don’t forget to try and fund your education with as much free money as possible – a great place to start is by creating a free profile on Scholarships.com, where you’ll get matched with financial aid that is unique to you!

And don't forget, you should pay for your college education with as much free money as possible! Find as many scholarships and grants as you can before turning to student loans. Visit the Scholarships.com free college scholarship search today where you'll get matched with countless scholarships and grants for which you qualify, then apply and win! It’s that easy!

Saving for your college education early is essential in the quest to actually affording it. And if you're lucky enough to have your guardians and relatives willing to help with college costs, the 529 tuition savings plan was the surest route to take. If you aren't familiar, the 529 tuition savings plan was designed to help parents begin saving for college by providing an investment option that allows them to withdraw funds for qualified educational expenses tax-free...or at least that was the case.

According to the Wall Street Journal, President Obama has proposed "rolling back" tax benefits of 529 college savings plans and "repeal tax incentives going forward" for Coverdell Education Savings Accounts. For now, both plans allow parents, grandparents or anyone looking to help fund a kid's education to contribute after-tax dollars into accounts that grow tax-free; when money is withdrawn for educational expenses, there’d be no tax either. President Obama has suggested changing the law so that withdrawals would be taxed as ordinary income. Yikes. Why the change? The administration has labeled the plans “inefficient” and complained that the benefit accrues too heavily toward higher-income Americans. (For more on this story, click here.)

With the plans as popular as they are – more than 12 million children from 7 million households are currently benefitting – what negative affects could the proposed changes have? Would they affect you personally? Share your thoughts in the comments section.

And remember, there’s no need to rely on expensive student loan options to pay for your college education. For more information on finding free scholarship money for college, conduct a Scholarships.com free college scholarship search today, then apply and win! It’s that easy!

Figuring out how you’re going to pay for your college education can be intimidating. No one wants to pay off student loans for the rest of their lives, full-tuition scholarships are rare and federal student aid seldom covers all college costs but if you’re lucky enough to have a parent or relative willing to help curb the financial strains, it’s important to note that college savings plans are becoming increasingly flexible and affordable. Here are some of the changes to the 529 savings plans for 2013:

Increase gift tax exemptions: Grandparents can gift $14,000 annually before they’re charged a gift tax. Since five years of the exempted amount can be gifted at one time, that’s a five-year donation of $70,000 per grandchild while a married couple could potentially gift $140,000, provided they don’t give additional funds to the same grandchild in the five-year span.

Expanded qualified expenses: Last year, families couldn’t use 529 plan funds for laptops, iPads, internet service and software but the IRS is going high tech and realizes these are necessary items for higher education. Parents of a student who receives a full or partial scholarship can now use the funds to enhance their child’s educational experience.

Declining plan prices: Competitive bidding among plan management companies to run 529 plans on behalf of states is contributing to the trend of downward pricing. (For more information about 529 plans, click here.)

And don't forget, you should pay for your college education with as much free money as possible! Find as many scholarships and grants as you can before turning to student loans. Visit the Scholarships.com free college scholarship search today where you'll get matched with countless scholarships and grants for which you qualify, then apply and win! It’s that easy!

The report, from MassINC, a think tank in Massachusetts, looked at decisions students and families need to make when applying to and paying for college, and the information they need to make those decisions. It found that students and parents currently have great difficulty "getting the most out of their col­lege dollar," as the price of higher education only continues to rise.

Perhaps even more alarming is that families have started borrowing more to pay for college, without considering risk and the rate of their return. Related to increases in student borrowing amounts, an article in The Chronicle of Higher Education yesterday looks at the idea that doctoral students finish faster if they take out large loans. The most obvious answer why is that taking out more student loans allows the students to take more classes, and quit part-time jobs that may have been reducing their college costs. It's a choice students must make every day - should you sacrifice some comfort to reduce your student loan debt, even if it means taking longer to complete your degree? It's a personal decision, but students should be aware that they'll be expected to start repaying any debt once they graduate.

The Massachusetts study also found that students and families had little knowledge of tax benefits and college savings plans, and how to compare them. For example, there are 118 different 529 Plans, and the resources out there do little in the way of pointing consumers to the advantages and disadvantages of each. Families and students also admit to knowing little about the actual sticker price of colleges, as that often depends on the funds available to assist incoming students, an unknown when those students first apply.

The report's authors suggest families and students must become more like "savvy consumers" who are able to understand and successfully manipulate the college and financial aid application process to their advantage. The process should also be made less complex, an idea that is already being explored by federal legislation such as the Higher Education Opportunity Act. Finally, families need reliable measures about the educational experience that colleges and universities offer beyond the annual rankings we see in the Princeton Review, for example. According to the report, while the U.S. Department of Education is providing increasingly consistent and accessible indicators, such as graduation rates, this branch of the college-bound decision remains the weakest.

And remember, there’s no need to rely on expensive student loan options to pay for your college education. For more information on finding free scholarship money for college, conduct a Scholarships.com free college scholarship search today, then apply and win! It’s that easy!

Personal savings, college endowments and college savings plans all suffered when the stock market took a nose dive last fall. Students, families and even schools who thought they were financially secure soon learned otherwise and had to scramble to come up with alternative plans to pay bills. Now that things are beginning to even out and return to a state of normalcy, those affected by the recession are looking towards recovery and assessing their long-term plans. For some college savings plans, especially "guaranteed" tuition savings plans, the future looks particularly bleak, even without further financial setbacks.

Guaranteed tuition savings plans are one of several types of college savings plans, which allow families to save for college tax-free and often involve other incentives, as well. Prepaid tuition savings plans allow families to pay tuition ahead of time at certain schools, ensuring that bills will be paid for students, even if tuition skyrockets, as it seems likely to continue doing. Many families in states where they're offered have purchased them for young children who may not be attending college for another 15 years or more, but some plans have already begun to run out of money due to losses in the stock market and the sharp rise of college costs.

As a result, states including Texas, Alabama and Pennsylvania are struggling with the prospect of not being able to fund their current obligations to these plans. Several prepaid tuition plans have been closed off to new investors, including the plans in Texas and Alabama. Despite this, Alabama may not have enough money to pay tuition for all students currently enrolled in its prepaid plan. Pennsylvania has introduced legislation to remove "guaranteed" from its tuition savings plan's name and make it clear that the state has no obligation to bail out the plan if it doesn't earn enough money to meet its obligations.

Texas has also announced a rule change for people who currently have money invested in its guaranteed tuiton plan. When they invested, families were told that if their children did not go to one of the state colleges whose tuition the plan will fully fund, they would be able to close their account and withdraw the full amount of tuition at those institutions at that time. Now, the Texas Prepaid Higher Education Tuition Board has said that families whose children do not attend one of the schools included in the plan can only withdraw the amount they invested, minus an administrative fee. State legislators have urged the board to reconsider, but so far it appears that those with money invested have three choices: they can pull their money out before the rule goes into effect on October 30, they can limit their children's college choices to those sanctioned by the tuition savings plan, or they can take a guaranteed loss on their "guaranteed" tuition investment.

To help you avoid the problems currently facing Texas parents, US News has a helpful article on questions to ask before investing in a prepaid college savings plan. Prepaid tuition plans, 529 plans, and other college savings vehicles can still be a good idea, even though they've been through difficult times. As with many things, the trick to being successful in your choice is first doing your research and figure out which plan is best for you and your family.

Going to college doesn't have to break the bank or saddle you with tens of thousands of dollars in student loan debt. Check out the Scholarships.com free college scholarship search where you’ll discover you qualify for hundreds of thousands of dollars in scholarships in just a few minutes, then apply and win! It’s that easy!

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Today is May 29, also known as "529 College Savings Day," named after 529 plans, which are popular state-sponsored college savings plans. Today has been designated as a day to raise awareness of the importance of saving for college, as well as ways to do so. While 529 plans suffered along with everything else in the stock market, they are still being emphasized as a valuable tool for saving money for college.

According to a poll conducted by Gallup and Sallie Mae, 62 percent of families with college-bound children are already saving for college in some capacity, with the majority planning to contribute at least half of a child's tuition. About half of families that are saving already regularly contribute to college funds, and around a third use state 529 plans. The Chronicle of Higher Education has more information on the survey, as well as a link to the results.

If you're curious about college savings plans, we have some resources to help you get started. A few months ago, we did a couple blog posts on saving for college, featuring a discussion of 529 plans, as well as other savings options. While the focus of today is on saving for college, it's also a good time to look into college scholarships, especially for students still in high school. Read up on college savings accounts today, then do a free college scholarship search to find more options for paying for school.

And remember, there’s no need to rely on expensive student loan options to pay for your college education. For more information on finding free scholarship money for college, conduct a Scholarships.com free college scholarship search today, then apply and win! It’s that easy!

More students are completing the FAFSA early for 2009-2010 according to data collected by the Department of Education. By the end of February, more than 3 million students had filed their FAFSA for the next academic year, an increase of over 20 percent from the first two months of 2008. As application deadlines approach, this flood of applications could slow, but right now it looks like there will be more demand for financial aid in the coming school year.

Federal student financial aid is becoming an increasingly attractive means of paying for college. For starters, federal aid is up for 2009-2010--in the case of Federal Pell Grants, way up. A combination of factors has boosted maximum grants to $5,350 in 2009-2010, while simultaneously raising the minimum award to $976 and the maximum qualifying Expected Family Contribution to $4,671. Low interest rates and expanded federal loan cancellation and consolidation options are also making federal student loans more appealing.

Meanwhile, several other payment options aren't doing so well. Private loans became harder to obtain in 2008, and also saw fairly substantial interest rate increases. College savings plans, such as 529 plans, took big hits in the stock market, and even some prepaid tuition plans are struggling to guarantee payouts for upcoming years. College endowments have also been affected by financial troubles, and some endowed scholarships may be reduced or unavailable for the coming academic year.

Going to college doesn't have to break the bank or saddle you with tens of thousands of dollars in student loan debt. Check out the Scholarships.com free college scholarship search where you’ll discover you qualify for hundreds of thousands of dollars in scholarships in just a few minutes, then apply and win! It’s that easy!

Paying for college can be a struggle. Nobody wants to repay student loans forever, not everybody is going to land a full-tuition scholarship, and federal student financial aid seldom takes care of all college costs. If you're a parent or relative looking ahead to cover college costs for a child, finding scholarships is a great step now, but you may also want to consider college savings plans.

Read below for information on 529 savings plans, which are one of the most popular and diverse options for college savings. If this is not for you, check back tomorrow for more information on other savings options.

529 Savings Plans While 529 plans have sustained average losses of 21 percent in the last year, they can still be a good idea, especially if you choose your plan carefully and have plenty of time to save. Many 529 plans allow you to move your savings into a much more conservative portfolio when the student nears college, an option they're sure to publicize based on the recent behavior of the stock market. While there are limits on how many changes can be made to a 529 plan per year, the plans are otherwise quite flexible and varied, so it's easy to find one that works for your situation. Plus, 529 plans can be taken out in the parent's name, rather than the student's, so they will only minimally affect a student's financial aid eligibility.

Additionally, contribution limits are high, income limits are nonexistent, minimum contribution requirements tend to be low, and many states offer a variety of incentives for residents who contribute to their plans. As an added bonus, many 529 plans can accept contributions from anybody anywhere, not just the people named on the account, and several programs have been created to take advantage of this. For example, some plans allow a portion of credit card purchases or purchases at certain stores to go towards a particular student's 529 plan.

Prepaid Tuition Savings Plans If you're hesitant about sticking money for college in the stock market with uncertain returns, another type of 529 plan is also gaining popularity. Prepaid tuition plans allow families to contribute a fixed amount now in exchange for a certain portion of tuition being covered in the future. Many states do this for their state colleges and universities, and the Independent 529 plan, which is accepted by over 200 private colleges, also fixes contributions to portions of future tuition. Both of these varieties eliminate worries about tuition inflation, though if tuition actually goes down between now and when the student starts college, a prepaid plan might not be the most lucrative option.

The Down Side 529 plans do have drawbacks and limitations. Money must be spent on education, and the expenses that qualify are limited to undergraduate tuition, fees, educational expenses like books, and now computers. However, if the student is enrolled at least half-time, money from a 529 plan can also go towards room and board, so even if your student earns a full-tuition scholarship, it's possible to still take advantage of 529 savings. Money must stay in a plan for at least 3 years, so if you're saving for a college sophomore, you're out of luck with these. However, you can transfer the unused portion of a 529 plan to another family member without incurring the heavy withdrawal penalties, and it may also be possible to use the funds towards graduate or professional school.

Plans also vary from state to state, so your state's plan might not have the best benefits for you, or might not offer as sweet a deal in terms of tax breaks or low fees as the next state over offers its residents. Luckily, you can shop around among a variety of plans, including ones offered by several other states.

529 plans are not the only college saving option, though they remain the most popular and perhaps the most well-known. Check back tomorrow for information on the rest of the pack.

And don't forget, you should pay for your college education with as much free money as possible! Find as many scholarships and grants as you can before turning to student loans. Visit the Scholarships.com free college scholarship search today where you'll get matched with countless scholarships and grants for which you qualify, then apply and win! It’s that easy!

With all the talk about spending and stimulus legislation and bailouts, it can be easy to lose track of what benefits taxpayers can actually expect to receive. Most likely, everyone knows that the American Recovery and Reinvestment Act, perhaps better known as “the stimulus,” will create jobs through funding “shovel-ready” projects and will put a little extra in paychecks through a tax rebate that will take effect this summer. You probably also know that there’s also financial aid in there for education, but you may not be sure exactly what.

Frankly, so much federal legislation and talk of change has been floating around in the last two years that anyone who last paid a tuition bill as recently as 2007 probably doesn’t even recognize financial aid in 2009. To help, we’ve prepared a breakdown of where student financial aid stands currently.

Pell Grants. The American Recovery and Reinvestment Act increased the maximum Federal Pell Grant award from $4,731 for 2008-2009 to $5,350 for 2009-2010. The maximum Pell award will go up again in 2010-2011 to $5,500 under this legislation.

The income threshold to qualify for federal grant programs also increased. Now students with an expected family contribution (a number determined by completing the FAFSA) of up to $4,671 (up from $4,041 this year) can qualify for Pell grants. They will not receive the whole award, but even the minimum award has increased—from $400 for full-time students in 2007-2008 to $976 for the same group in 2009-2010, due in part to the College Cost Reduction and Access Act, which increased all Pell awards by $490.

Work-Study. More students will also see “federal work-study” on their financial aid award letter in 2009-2010 thanks to the economic stimulus legislation. More money is available to work-study programs that allow students to get a part-time job on (or occasionally off) campus and count the income as financial aid. Work-study programs provide great job opportunities for student workers, and since the money is given in the form of a paycheck, students can use these funds to pay their tuition bills or to cover living expenses.

Tax Benefits. One of the biggest perks of the American Recovery and Reinvestment Act is the creation of the American Opportunity Tax Credit, which replaces the Hope Credit. The tax benefits under Hope only went up to $1,800 and only could be taken for two years. The American Opportunity Tax Credit can be used for four years, can fund up to $2,500 of college costs (100% of the first $2,000 plus 25% of the next $2,000, for a total of $2,500), and up to 40% is refundable, so people who don’t pay as much in taxes as they would qualify to receive in the credit can still get something.

Additionally, the income level at which the American Opportunity Tax Credit phases out is higher than the Hope credit, allowing individuals with incomes of up to $90,000 and married couples with incomes of up to $180,000 to take it.

Families will be able to start taking advantage of the American Opportunity Tax Credit on their 2009 taxes.

Other Benefits. Much more is included in the American Recovery and Reinvestment Act. For example, students with 529 savings plans can now use that money to purchase a computer for school. Additionally, states will receive billions of dollars over the next two years, with a portion of the money devoted specifically to funding projects at public institutions of higher education, as well preventing or reversing massive reductions in state education spending.

And don't forget, you should pay for your college education with as much free money as possible! Find as many scholarships and grants as you can before turning to student loans. Visit the Scholarships.com free college scholarship search today where you'll get matched with countless scholarships and grants for which you qualify, then apply and win! It’s that easy!

It's looking like federal student financial aid will be increased in the forthcoming economic stimulus package, at least based on the legislation presented in each house of Congress in its current form. While the House stimulus bill contains more aid for education, the Senate bill also proposes higher education tax benefits and increases in Federal Pell Grant funding.

The House bill promises:

$15.6 billion to increase the Pell Grant by $500 to $5,350 and fully fund the increase

$3.5 billion to improve energy efficiency and infrastructure on college campuses

$39 billion to school districts and public colleges

$25 billion to states for "high priority" needs which may include education

The House bill also includes money to improve financial aid administration and further assist student loan lenders, while the Senate bill will allow computers to be counted as education expenses towards which 529 plans can be used. The bills are facing some Republican opposition, especially regarding education spending, as it's been argued that construction projects and increases to student financial aid will not directly and immediately benefit the economy. As Congress and the White House continue to hash out the details of these bills, amounts are likely to change. But for now, it appears that colleges and college students may receive a little extra financial aid from the government this year.

Going to college doesn't have to break the bank or saddle you with tens of thousands of dollars in student loan debt. Check out the Scholarships.com free college scholarship search where you’ll discover you qualify for hundreds of thousands of dollars in scholarships in just a few minutes, then apply and win! It’s that easy!